I'm hearing this argument now for at least 10 years, and yet devs still keep pressing themselves into making bigger and unwieldier games that contain thousands of bugs at launch. Why?
The answer's pretty simple, actually - this argument was always correct but was offset by market growth. Up to a certain point you could offset growing the budget by pushing more sales, and pushing more sales became an option as going multiplatform got easier and the PC market got dominated by big digital distributors.
Problem is I don't think there's much growth to be had anymore and you can't offset the growing risk anymore. So we're reaching a point where one way or another you want to start maintaining the sales while cutting the costs.
It's the growing pains of an industry in transition. SaaS will be the future of the gaming industry, not because it is good, but because it's the model that's taking hold right now in the software development world. The most obvious element would be the cloud system, like Game Pass or the Play Station one. They aren't unpopular, but at the same time, console gamers are used to having to pay for multiplayer features. In fact, console gamers are used to pay for things that pc users (not just gamers) haven't thought of in their lives. I remember being very surprised when I learned that fact, like, why would you pay for access to the multiplayer portion of the game if you're already paying your ISP for your internet connection?
Regardless, SaaS also allows for constant monetization of a service. You're paying once for a video game. And you're paying 60 bucks. So a SaaS model allows you to pay 4,99 (for instance) per month so you can play a 60 bucks game. From a consumer standpoint, getting to play 5 AAA games for 5 bucks is a win win scenario, but then you have to consider other factors like the quality of your internet connection, which should only be a worry if you don't have access to fiber optic stuff or live in a country that cucks paying customers, like the First World countries (and in particular the USA), and then other, more nebulous aspects like ownership or even the ammount of money that studios are receiving per "stream". Streaming has been another way for higher ups to fuck the creator before they get fucked by them. However I wouldn't doubt that someone has already spoken of a Steam Pass during one of Valve's meetings.
Yes and no. SaaS is an option for certain kinds of products, or (in the case of straight-to-gamepass) products with a limited budget. And straight-to-gamepass development is a niche that exists mainly because owners of GoD platforms need to expand their library and boost subscriptions. Development like that isn't really profitable in most cases for the publisher.
The reason SaaS is taking hold in a lot of places in general software is that the software is used continuously (Office 365, Adobe CC etc). Thus SaaS is an evolution of an already existing practice with licensing/updates. In gaming you have the unique situation that doesn't exist in a lot of software where the grand majority of products sold are effectively one-off consumables. Even with non-MMO games that are praised for their replayability, it takes a special kind of person to keep playing it regularly for a long period of time and they're overall a minority in the gamer demographic. And for the games with extreme replayability there's other models, like Paradox-like focus on constantly releasing new DLCs and hence keeping the product fresh and generating revenue.
The SaaS model just wouldn't work for the grand majority of titles unless you significantly overhauled and MMO-ify them, and there's limits to what you can do there to keep a product being appealing. You can throw in online features into what's basically a single player game but in most cases it won't affect the big picture much.
tl;dr - SaaS works for MMOs (of which the ones with subscription fees have always been historically SaaS) and games which have multiplayer as the core feature. For single player games I don't see it happening, and game passes ultimately will function as a repository of older games that had the sales tail drop below the point of profitability. So first you go full-price distribution, then start dropping the price and doing promos and then sell your title to a GoD (games on demand) platform. The biggest change will be I believe that the GoD platforms will probably kill of the practice of game bundles as previously this was your last resort of squeezing extra sales.